PROJECT SUMMARY As an alternative to autograft bone, mesenchymal stem cells (MSC) have been employed to accelerate bone repair. However, current MSC sources have significant drawbacks, including: (1) scarce availability, (2) need for culture, and (3) significant cell heterogeneity with decreased bone-forming efficacy. Our solution is the use of a novel, purified and uncultured stem cell source, known as Perivascular Stem Cells (PSC). PSC are prospectively purified ancestors of culture-derived, traditional MSC, and are identified by their presence around vessels. Unlike bone marrow stem cells (BMSC), PSC have significant advantages for clinical translation, including: (1) isolation by fluorescence activated cell sorting (FACS) rather than culture, (2) high homogeneity, and (3) high quantity for clinical application. Our data show that PSC exert bone healing effects via both direct and paracrine mechanisms, including a combination of pro-osteogenic and pro-vasculogenic effects on host bone tissue. Exciting recent data suggest that PSC frequency, viability, growth and differentiation factor (GDF) elaboration and osteogenic differentiation are resistant to the detrimental effects of osteoporotic bone loss. In contrast, BMSC show reduced numbers, proliferation, and osteogenic differentiation potential with osteoporosis. This marked difference has led us to directly and systematically compare the bone healing potential of PSC versus BMSC in the current proposal. Overall, the following Early Stage / New Investigator application will address the cellular and signaling mechanisms through which perivascular stem cells promote bone healing through direct and indirect effects, and their unique resistance to osteoporotic conditions. AIM 1: Evaluate the direct and paracrine effects of PSC in bone healing. Through a systematic series of studies, we will examine the effects of PSC on osteoprogenitor cell migration and differentiation, as well as angiogenesis and neovascularization in bone healing. Osteoblast and endothelial cell reporter animals will be utilized to compare host:donor cell contributions in our previously described femoral segmental defect (FSD) model. Studies will be performed head-to-head with culture-derived BMSC application. Differences in bone healing outcomes between treatment groups will be statistically correlated with in vitro GDF elaboration. AIM 2: Demonstrate the importance of host versus donor osteoporosis in PSC bone healing. As mentioned, PSC demonstrate marked resistance to the detrimental effects of osteoporotic bone loss. However, our pilot data suggest that osteoporotic status of the ?host bone? but not ?donor MSC? may impact bone healing. Here, we will determine the extent to which osteoporosis within transplanted PSC or host bone tissue affects bone healing. Studies will be performed head-to-head with culture-derived BMSC application in our FSD model. Differences in bone healing will be correlated with GDF and bone inhibitory signal expression.